On July 31, 2021, Mexico Company paid $3,550,000 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita reported the following balance sheet at the time of the acquisition. Current assets Noncurrent assets Total assets $800,000 Current liabilities $2,700,000 Long-term liabilities $3,500,000 Stockholders' equity Total liabilities and stockholders' equity $600,000 $500,000 $2,400,000 $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchit $850,000 higher than the book value. Over the next few months the division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2021, Conchita reports the following balance sheet information. Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities $500,000 $2,500,000 ($800,000) ($550,000) It is determined that the fair value of the Conchita Division is $1,750,000 Long-term liabilities